What is a pre construction occupancy Period ? Why is it important for me ?

As a buyer when you buy a pre-construction condominium you’ll be given two different dates: the interim occupancy date and the closing date. Interim occupancy is unique to pre-construction condos, and the process may be confusing to some, especially first-time homebuyers. Here’s your comprehensive guide on what to expect.

In pre-construction condos there are two types of closing: 

1) Interim Occupancy

2) Final Closing. 

However, once the PCOP has expired, you're no longer able to purchase a unit and will have to wait for the next phase of construction.

What is Interim Occupancy?

Interim occupancy is the period of time between the day you occupy your unit (move in) and the day you take ownership (close). One of the reasons for interim occupancy is to allow the builder to focus on the sold suites and some of the common elements before the building is registered.

Final Closing

Final closing occurs once construction is complete and the developer is ready to register the condominium. Ownership is now transferred to the individual unit purchasers, and interim occupancy now ends. Homeowners are now able to secure a mortgage, rent or sell their suite; property management will also take over at this time.

A pre construction occupancy period is the time frame that a builder or their sales representative will give you when asking about purchasing a pre construction condo. It's important to know this information because it will help you figure out when you can move into your new pre construction home and what to expect during the construction process.

What Are My Occupancy Fees Paying For?

The monthly fees charged by the builder during interim occupancy include interest on the unpaid balance of your unit, contribution fees for common elements (not unlike maintenance fees) and estimated property taxes. For more details, refer to Section 80(4) of the Condo Act.

So, what happens to the occupancy fee I paid? Does it go towards paying my mortgage?

Unfortunately Occupancy fees do not contribute towards your Mortgage. The money goes directly to the builder. Builders use the occupancy fees funds collected to recover the costs of trying to continue to sell unsold units and get the building running.

Also, one thing to keep in mind is that the builder doesn’t get any of your down payment until the building closes, so they have the incentive to have as quick of an occupancy period as possible. It's in their best interest to get their units sold and they can use the funds and move onto future projects.